(Economic Observation) How much impact does the adjustment of import and export tariffs have on China's steel industry?
China News Service, Beijing, April 29th, title: How much impact does the adjustment of import and export tariffs have on China's steel industry?
China News Agency reporter Ruan Yulin
From May 1st, China adjusted tariffs on certain steel products.
Industry insiders pointed out that in the context of China's steel industry's carbon peak, increasing imports and reducing exports have become an inevitable direction of regulation.
146 categories of steel products cancel export tax rebates
The Customs Tariff Commission of the State Council recently announced that from May 1st, tariffs on certain steel products will be adjusted.
In terms of imports, a provisional zero import tariff rate is imposed on pig iron, crude steel, recycled steel raw materials, ferrochrome and other products; in terms of exports, the export tariffs on ferrosilicon, ferrochrome, high-purity pig iron and other products are appropriately increased and implemented after adjustment 25% export tax rate, 20% temporary export tax rate, 15% temporary export tax rate.
At the same time, the export tax rebate of some steel products will be cancelled.
Since May 1, the export tax rebate for 146 types of iron and steel products, including alloy steel powder, cold-rolled non-coiled material, stainless steel wire, and iron and steel sleepers, will be cancelled.
Luo Tiejun, vice chairman of the China Iron and Steel Association, said that since 2005, China has transformed from a net importer of steel to a net exporter, and it continues to this day.
For many years, we have been pursuing to increase the self-sufficiency rate of domestic steel.
From now on, the steel industry must accelerate the transformation of the concept of self-sufficiency and adapt to the new development pattern of steel import and export.
A realistic choice for low carbon emission reduction
The "Steel Industry Carbon Peak and Carbon Reduction Action Plan" is being prepared. The steel industry's carbon peak target is initially set as: before 2025, the steel industry will achieve a peak carbon emission; by 2030, the steel industry's carbon emissions will be lower than the peak 30%, is expected to achieve 420 million tons of carbon emission reduction.
Wang Guoqing, director of the Lange Iron and Steel Research Center, said in an interview with a reporter from China News Agency on the 29th that since China put forward the carbon peak and carbon neutral target in September 2020, the steel industry has been the industry with the largest carbon emissions in China’s manufacturing industry. The pressure to reduce carbon emissions is obvious.
In addition to the development of low-carbon metallurgical technology, output control is the most direct way for the industry to achieve low-carbon emission reduction.
"The adjustment of steel-related tariffs was made under the guiding ideology of carbon neutrality," said Political Commissar Lu, chief economist of the Industrial Bank. Under the current global country-specific carbon emission accounting system, about 20% of China's carbon emissions are through exports. Trade meets the production and consumption needs of other countries and regions.
Taking into account the impact of implicit carbon emissions in import and export trade, China has optimized its trade structure by optimizing the tariff structure and other ways to achieve great potential for carbon emission reduction.
Help improve domestic supply and demand
With the recovery of the world economy, foreign steel demand has gradually improved, and China's steel exports have also recovered significantly.
Official data show that in the first quarter, China exported 17.682 million tons of steel products, a year-on-year increase of 23.8%.
During the same period, China’s imports of iron ore increased by 8% year-on-year, and the average import price reached US$150.79 per ton, a year-on-year increase of 64.51%.
Wang Guoqing believes that this time the country has introduced adjustments to import and export tariffs on primary products, and canceled export tax rebates for related products, and implemented zero import tentative tax rates on pig iron, crude steel, and recycled steel raw materials. The purpose is to reduce the primary products of the steel industry. Import costs, increase the import volume of related products, and promote the import of primary products such as pig iron, steel recycled raw materials, steel billets, etc., will help reduce overseas dependence on iron ore and improve the effect of domestic resource protection.
At the same time, the abolition of export tax rebates for related products will increase the export costs of related export companies. Related companies can only obtain profits by increasing the export price of steel products, which will weaken the price competitiveness of related products in the international market and inhibit their exports.
Most product exports will be transferred back to the domestic market, which will help ease the tension in domestic supply and demand.
Control production capacity and promote transformation
In December last year, the Ministry of Industry and Information Technology made it clear that it must resolutely reduce crude steel output to ensure a year-on-year decline in crude steel output.
A few days ago, the National Development and Reform Commission and the Ministry of Industry and Information Technology conducted research and deployment on the “look back” of steel production capacity reduction in 2021 and the reduction of crude steel output to guide steel companies to abandon the extensive development method of winning by quantity and promote the high-quality development of the steel industry. .
Guotai Junan analyst Li Pengfei believes that under the background of carbon neutrality, it is imperative to reduce crude steel output and adjust the production structure. This year, the steel industry has a high probability of achieving output reduction and the production cycle is basically over.
Under this circumstance, the industrial structure will improve and the degree of concentration will increase, and the competitive landscape will be gradually optimized.
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